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Full-Text Articles in Social and Behavioral Sciences

Asset Markets, General Equilibrium And The Neutrality Of Money, Christophe Chamley, Heracles M. Polemarchakis Sep 1981

Asset Markets, General Equilibrium And The Neutrality Of Money, Christophe Chamley, Heracles M. Polemarchakis

Cowles Foundation Discussion Papers

When government liabilities (including money) are held in private portfolios only as stores of value, and do not provide additional benefits (as liquidity services), the real variables in an economy with uncertainty are not affected by the government’s trading in assets. There are also policies which alter the money supply through taxes or subsidies, and affect the price of money without changing real variables.


The Optimal Progressive Income Tax — The Existence And The Limit Tax Rates, Mamoru Kaneko Aug 1981

The Optimal Progressive Income Tax — The Existence And The Limit Tax Rates, Mamoru Kaneko

Cowles Foundation Discussion Papers

The purpose of this paper is to consider the problem of optimal income taxation in the domain of progressive (convex) income tax function. This paper proves the existence of an optimal tax function and that the optimal marginal and average tax rates tend asymptotically to 100 percent as income level becomes arbitrarily high.


Algorithms For The Linear Complementarity Problem Which Allow An Arbitrary Starting Point, Dolf A.J.J Talman, Ludo Van Der Heyden Aug 1981

Algorithms For The Linear Complementarity Problem Which Allow An Arbitrary Starting Point, Dolf A.J.J Talman, Ludo Van Der Heyden

Cowles Foundation Discussion Papers

No abstract provided.


The Conventionally Stable Sets In Noncooperative Games With Limited Observations: Definitions And Introductory Arguments, Mamoru Kaneko Aug 1981

The Conventionally Stable Sets In Noncooperative Games With Limited Observations: Definitions And Introductory Arguments, Mamoru Kaneko

Cowles Foundation Discussion Papers

This paper attempts to define a new solution concept for n-person noncooperative games. The idea of the new concept is based on that of the von Neumann-Morgenstern stable set, or more precisely, rather on their interpretation of it which they call “standards of behavior.” This new approach enables us to consider new interesting problems of information. Further this approach gives us a plausible interpretation of Nash equilibrium. This paper provides the definition and considers the new solution concept for zero-sum two-person games, the prisoner’s dilemma, the battle of sexes and games with a continuum of players.


Schumpeterian Dynamics I. An Evolutionary Model Of Innovation And Imitation, Katsuhito Iwai Aug 1981

Schumpeterian Dynamics I. An Evolutionary Model Of Innovation And Imitation, Katsuhito Iwai

Cowles Foundation Discussion Papers

No abstract provided.


Schumpeterian Dynamics Ii. Technological Progress, Firm Growth And ‘Economic Selection', Katsuhito Iwai Aug 1981

Schumpeterian Dynamics Ii. Technological Progress, Firm Growth And ‘Economic Selection', Katsuhito Iwai

Cowles Foundation Discussion Papers

No abstract provided.


On The Infinite Welfare Cost Of Inflation And Other Second Order Effects, Christophe Chamley Jul 1981

On The Infinite Welfare Cost Of Inflation And Other Second Order Effects, Christophe Chamley

Cowles Foundation Discussion Papers

The optimal inflation rate is analyzed in a simple model of intertemporal general equilibrium where agents have an operative bequest motive and taxation is distortionary. Monetary balances are used as a productive input, and agents have perfect foresight. The optimal value of the permanent inflation rate can be approximated by a simple formula. The case in which the growth of aggregate income exceeds the social discount rate is unlikely to be important, and the optimal value of the permanent inflation rate depends on the existence of a short-run trade-off between unemployment and inflation.


Approximate Equilibria With Bounds Independent Of Preferences, Robert M. Anderson, M. Ali Khan, Salim Rashid Jun 1981

Approximate Equilibria With Bounds Independent Of Preferences, Robert M. Anderson, M. Ali Khan, Salim Rashid

Cowles Foundation Discussion Papers

We prove the existence of approximate equilibria in exchange economies, giving bounds on the excess demand in terms of the number of traders and norms of the endowments, but independent of the preferences.


Arbitrage Pricing Theory In A Finite Economy, John J. Beggs Jun 1981

Arbitrage Pricing Theory In A Finite Economy, John J. Beggs

Cowles Foundation Discussion Papers

No abstract provided.


Estimated Effects Of Relative Prices On Trade Shares, Ray C. Fair Jun 1981

Estimated Effects Of Relative Prices On Trade Shares, Ray C. Fair

Cowles Foundation Discussion Papers

No abstract provided.


Efficient Stationary Taxation And Intertemporal General Equilibrium, Christophe Chamley, Douglas Downing May 1981

Efficient Stationary Taxation And Intertemporal General Equilibrium, Christophe Chamley, Douglas Downing

Cowles Foundation Discussion Papers

We present a method to analyze the welfare cost of price distortions created by taxes on the incomes of capital and labor and on consumption in an intertemporal model of general equilibrium. This efficiency cost depends in an important way on the production technology. It is not very sensitive to the ratio between the tax rates on capital and labor respectively, when the elasticity of substitution between these factors is small. Our method allows us to determine under the assumptions of the model, the optimal combination of taxes on capital and labor income respectively. The consumption tax is more efficient …


Market Structure In The ‘Research And Development’ Phase, John J. Beggs May 1981

Market Structure In The ‘Research And Development’ Phase, John J. Beggs

Cowles Foundation Discussion Papers

No abstract provided.


Mandatory Retirement Saving And Capital Formation, Walter Dolde, James Tobin May 1981

Mandatory Retirement Saving And Capital Formation, Walter Dolde, James Tobin

Cowles Foundation Discussion Papers

No abstract provided.


The Dynamic Interaction Between Industry Level Profits And Research And Development, John J. Beggs Apr 1981

The Dynamic Interaction Between Industry Level Profits And Research And Development, John J. Beggs

Cowles Foundation Discussion Papers

No abstract provided.


Interest Rate Policies And Informational Efficiency, Laurence Weiss Apr 1981

Interest Rate Policies And Informational Efficiency, Laurence Weiss

Cowles Foundation Discussion Papers

Monetary policy may be implemented either by controlling the nominal money supply or by fixing the nominal interest rates. This paper investigates the effects on available information of both kinds of policies in the equilibrium rational expectations model presented in Grossman-Weiss (1980). A necessary and sufficient condition for informational efficiency is that agents have homogenous expectations about the real interest rate. Interest rate policies can be first best in the sense of yielding higher quality information than any feasible money growth feedback policies. Unlike desirable money growth rules, interest rate policies do not require more information on behalf of the …


Ratio Equilibrium In An Economy With An Externality, Yozo Ito, Mamoru Kaneko Apr 1981

Ratio Equilibrium In An Economy With An Externality, Yozo Ito, Mamoru Kaneko

Cowles Foundation Discussion Papers

No abstract provided.


Strong Core Theorems With Nonconvex Preferences, Robert M. Anderson Apr 1981

Strong Core Theorems With Nonconvex Preferences, Robert M. Anderson

Cowles Foundation Discussion Papers

It is known that in large economies with strongly convex preferences, the commodity bundles agents receive at core allocations are near their demand sets. Without convexity, it is know that agents need not be near their demand sets, although they will satisfy a weaker condition. In this paper, we show that, for “most” economies (in the sense of probability and in the sense of the Baire category theorem), the stronger form of approximation holds without convexity.


Estimated Output, Price, Interest Rate, And Exchange Rate Linkages Among Countries, Ray C. Fair Apr 1981

Estimated Output, Price, Interest Rate, And Exchange Rate Linkages Among Countries, Ray C. Fair

Cowles Foundation Discussion Papers

No abstract provided.


Cake Slicing And Revealed Government Preference, John J. Beggs, Samuel Strong Mar 1981

Cake Slicing And Revealed Government Preference, John J. Beggs, Samuel Strong

Cowles Foundation Discussion Papers

No abstract provided.


Marginal Cost Pricing, Taxation And Subsidies In Urban Transport, John J. Beggs Mar 1981

Marginal Cost Pricing, Taxation And Subsidies In Urban Transport, John J. Beggs

Cowles Foundation Discussion Papers

No abstract provided.


An Empirical Note On The Disposition Of U.S. Corporations To Undertake Research And Development Expenditures, John J. Beggs Mar 1981

An Empirical Note On The Disposition Of U.S. Corporations To Undertake Research And Development Expenditures, John J. Beggs

Cowles Foundation Discussion Papers

No abstract provided.


Existence Of Equilibrium In A Hyperfinite Exchange Economy: I And Ii, Donald J. Brown, Lucinda M. Lewis Mar 1981

Existence Of Equilibrium In A Hyperfinite Exchange Economy: I And Ii, Donald J. Brown, Lucinda M. Lewis

Cowles Foundation Discussion Papers

No abstract provided.


Properties Of Manipulative Government Forecasts, John J. Beggs Mar 1981

Properties Of Manipulative Government Forecasts, John J. Beggs

Cowles Foundation Discussion Papers

No abstract provided.


The Demand For Telephone Services In Australia And The Welfare Implications Of Alternative Pricing Policies, John J. Beggs Mar 1981

The Demand For Telephone Services In Australia And The Welfare Implications Of Alternative Pricing Policies, John J. Beggs

Cowles Foundation Discussion Papers

No abstract provided.


Core Theory With Strongly Convex Preferences, Robert M. Anderson Jan 1981

Core Theory With Strongly Convex Preferences, Robert M. Anderson

Cowles Foundation Discussion Papers

We consider economies with preferences drawn from a very general class of strongly convex preferences, closely related to the class of convex (but intransitive and incomplete) preferences for which Mas-Colell proved the existence of competitive equilibria [13]. We prove a strong core limit theorem for sequences of such economies with a mild assumption on endowments (the largest endowment is small compared to the total endowment) and a uniform convexity condition. The results extend corresponding results in Hildenbrand’s book [8]. The proof, which is based on our earlier result for economies with more general preferences [2], is elementary.


Duopoly With Differentiated Products And Entry Barriers, Kofi O. Nti, Martin Shubik Jan 1981

Duopoly With Differentiated Products And Entry Barriers, Kofi O. Nti, Martin Shubik

Cowles Foundation Discussion Papers

Product differentiated duopoly with a potential entrant facing a single period fixed cost entry barriers is modeled as a noncooperative game. In addition to characterizing the equilibrium solutions and relating them to entry costs and product differentiation, a comparison of price and quantity competition shows that entry conditions are qualitatively sensitive to the strategic variables used in a given industry. Quantity competition appears to be more favorable for entry than price competition. The use of threats and other exclusionary tactics, such as limit pricing, decisively determine the outcome when entry costs are moderate.


Society, Land, Love Or Money (A Strategic Model Of How To Glue The Generations Together), Martin Shubik Jan 1981

Society, Land, Love Or Money (A Strategic Model Of How To Glue The Generations Together), Martin Shubik

Cowles Foundation Discussion Papers

No abstract provided.


Equilibria Of A Two-Person Non-Zero Sum Noisy Game Of Timing, Carolyn Pitchik Jan 1981

Equilibria Of A Two-Person Non-Zero Sum Noisy Game Of Timing, Carolyn Pitchik

Cowles Foundation Discussion Papers

Necessary and sufficient conditions are obtained for the existence of an equilibrium point (as well as for the existence of a dominating equilibrium point) in a two-person non-zero sum game of timing.


Characteristic Functions And The Tail Behavior Of Probability Distributions, Peter C.B. Phillips Dec 1980

Characteristic Functions And The Tail Behavior Of Probability Distributions, Peter C.B. Phillips

Cowles Foundation Discussion Papers

The theory of Fourier transforms of generalized functions is used to extract general formulas for the tail behavior of a probability distribution from the behavior of its characteristic function in the locality of the origin. The theory is applied to develop asymptotic formula for the tails of the stable distributions.


A Market Value Approach To Approximate Equilibria, Robert M. Anderson Dec 1980

A Market Value Approach To Approximate Equilibria, Robert M. Anderson

Cowles Foundation Discussion Papers

We consider the market value of excess demand as a measure of disequilibrium. We show that, in a fixed exchange economy, there exist approximate equilibria whose measures of disequilibrium depend only on the endowments and not on the preferences. A related bound on the norm of excess demand, depending on the endowments and the approximate equilibrium price, is also obtained. We show the existence of allocations which are nearly competitive, as measured by the largest proportion of demand given up at the allocation by any trader. We use these results to obtain, for very general sequences of exchange economies, allocations …